Trulia to Zillow: Your patent is ‘invalid on its face’

Zillow and Trulia have been at each other’s throats for years now. The two online real estate companies just don’t really like one another. Now, we’re getting a front row seat to the action — in part because of a patent lawsuit that Zillow filed against Trulia last September, a suit that came just a few days before Trulia started trading on Wall Street.

In a set of legal briefs filed this past week, both companies fired volleys at one another. Zillow defended its patent around the Zestimate automated home valuation technology and called its rival’s interpretation of the law “misleading and incomplete,” while lawyers for Trulia questioned the timing of Zillow’s suit.

“…To allow this case to proceed would waste judicial and party resources and reward Zillow for asserting—on the eve of Trulia’s IPO and over a year after the accused feature was launched—a patent that is invalid on its face,” they wrote.

Trulia is asking a federal judge to dismiss the patent suit, filing a motion last month in which it noted that “abstract ideas and principles are not patentable.”

But Zillow, which was granted a patent on the Zestimate technology in 2006, isn’t backing down. It fired back this past week:

“The ‘674 Patent is not an “idea,” it is a computer program, computer display, and interface that displays to homeowners inputs used in an automatic valuation of their homes, solicits and obtains revised inputs from homeowners, calculates a refined valuation based on those inputs, and then displays the refined valuation. This computer program, computer display, and interface has given Zillow a significant advantage over its competitors, as it has been used to refine the valuations of more than 33 million homes in Zillow’s database, which has made Zillow’s database “substantially more useful and accurate” and has “played a major role in Zillow’s success and growth into the largest real estate website, and most popular suite of mobile real estate applications for smartphones and tablet computers.”

Zillow also alleges that Trulia likely had knowledge of the patent when it launched its Trulia Estimates program, a direct competitor to the Zestimate.

This legal fight could get interesting. After all, how often do you have two direct rivals — recently publicly-traded companies that are both trying to upend a big market — duking it out in the courts?

Shares of Zillow are down about 13 percent since the lawsuit was filed. The company now boasts a market value of $1.1 billion — while Trulia is valued at $695 million.

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